Dutch Company Agrees to Pay $10.5 Million Civil Penalty to Settle Commerce Department Charges Involving Illegal Exports and Reexports to Iran and Sudan

WASHINGTON – The U.S. Department of Commerce's Bureau of Industry and Security (BIS), Office of Export Enforcement (OEE), today announced that Fokker Services B.V. ("Fokker Services"), a Netherlands-based aerospace services provider, has agreed to a $10.5 million civil settlement agreement in connection with the illegal export and re-export of aircraft parts, technology, and services to Iran and Sudan, both of which are subject to U.S. sanctions, including BIS licensing requirements. The settlement was reached as part of a global settlement involving the U.S. Department of Justice and the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC).

"The scope of today's global settlement with Fokker Services highlights the egregious nature of the violations and points to the commitment of OEE to pursue and prosecute those responsible no matter where they are located," said Under Secretary of Commerce Eric L. Hirschhorn. "OEE and our partner law enforcement colleagues will continue to use all means available to ensure that U.S. technology does not fall into the wrong hands."

The $10.5 million settlement with BIS also in part resolves the OFAC allegations. Under a deferred prosecution agreement entered into with the Department of Justice, the company is forfeiting an additional $10.5 million.

BIS has charged Fokker Services with 253 separate violations of the Export Administration Regulations (EAR), including for the export or reexport of items controlled for national security, missile technology and antiterrorism purposes. The charges include transactions involving Iranian military end users and violations of the terms of a temporary denial order in force at the time against Iran Air. The charges result from an investigation by OEE, along with the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and Homeland Security Investigations, that uncovered numerous violations that occurred between 2005 and 2010. The investigation found that Fokker Services systematically engaged in activity to avoid detection by U.S. investigators by taking steps to conceal the ultimate destination of the transactions.

Fokker Services is based in the Netherlands and is a subsidiary of Fokker Technologies Holding B.V., a manufacturing and technical services company also based in the Netherlands. Fokker Services had three subsidiaries: Fokker Aircraft Services, B.V., based in the Netherlands; Fokker Services Asia Pte. Ltd., based in Singapore; and Fokker Services, Inc., based in Atlanta, Georgia. Since 2010, Fokker Services has ceased all business with sanctioned countries and has implemented a new compliance program. Under the settlement, Fokker Services accepts and acknowledges responsibility for its conduct and that of its employees. The settlement is subject to final review and approval by the Assistant Secretary for Export Enforcement.

BIS controls exports and reexports of commodities, technology, and software for reasons of national security, missile technology, nuclear non-proliferation, chemical and biological weapons non-proliferation, crime control, regional stability, foreign policy and anti-terrorism. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit www.bis.doc.gov.

With this final rule, 15 of 21 Categories of the U.S. Munitions List have been successfully revised under the Export Control Reform Initiative. Work continues on the remaining categories and other efforts to modernize and harmonize the export control regulations.

Export Control Reform: Administration Publishes Changes to Regulations Controlling Exports of Military Electronics

The U.S. Department of State and U.S. Department of Commerce published regulations today that streamline U.S. export controls on certain military electronics by shifting less sensitive equipment, parts, and components from Category XI of the Department's U.S. Munitions List (USML) to the Department of Commerce's Commerce Control List (CCL). These changes, which are part of the President's Export Control Reform Initiative, enhance our national security by increasing interoperability with our close allies and partners. These changes also reduce incentives for purchasers to deliberately avoid U.S.-origin parts and components. As a result of these changes, the United States will have greater visibility on arms transfers and end-uses of concern, including human rights abuses. The changes will take effect on December 30, 2014.

Updating U.S. export control lists is a key component of the President's Export Control Reform Initiative. Export Control Reform increases the competitiveness of key U.S. manufacturing and technology sectors by focusing our controls on current threats, as well as adapting them to the changing economic and technological landscape. The initiative overhauls the Cold War-era system of regulations on exports of controlled technologies. Changes to Category XI were based on exhaustive technical and policy reviews conducted by the Departments of State, Defense, and Commerce, as well as representatives from other relevant departments and agencies. These reforms were also developed in close consultation with Congress and the private sector, which provided extensive public review and comment on the proposed changes.

With this final rule, 15 of 21 Categories of the U.S. Munitions List have been successfully revised under the Export Control Reform Initiative. Work continues on the remaining categories and other efforts to modernize and harmonize the export control regulations. 

Visit http://export.gov/ecr for more information on the President's Export Control Reform Initiative.  Additional information is available on the Export Control Reform page of the Department's Directorate of Defense Trade Controls website. For additional information, please contact the Bureau of Political-Military Affairs' Office of Congressional and Public Affairs at This email address is being protected from spambots. You need JavaScript enabled to view it..

Texas Woman Admits Illegally Exporting Advanced Combat Optical Gunsights, Sentenced to Prison

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JANIECE MICHELLE HOUGH, 41, of Kempner, Texas, pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to one count of smuggling goods from the United States. The charge stems from HOUGH’s sale of two Advanced Combat Optical Gunsights (ACOGs) destined for Germany in violation of the International Trafficking in Arms Regulations.

Following her plea of guilty, Judge Underhill sentenced HOUGH to six months of imprisonment, followed by three years of supervised release, the first eight months of which she must serve in home confinement. HOUGH was also ordered to perform 100 hours of community service and to forfeit $198,054.

According to court documents and statements made in court, HOUGH worked for a government contractor and was based at Fort Hood in Texas. On the side, she operated an online business selling surplus military clothing and equipment on eBay. While working at Fort Hood, HOUGH purchased military equipment from U.S. Army personnel, including Michael Bartch, for re-sale online. In June 2010, HOUGH sold and shipped two ACOGs to an individual in Connecticut with the understanding that the AGOGs were destined for Germany.

HOUGH did not have a license from the U.S. State Department, which is required to export ACOGs and other items on the U.S. Munitions List.

Bartch, of Copperas Cove, Texas, was prosecuted by the U.S. Attorney’s Office for the Western District of Texas. On April 17, 2013, he was sentenced to 24 months of imprisonment.

In the District of Connecticut, this case was investigated by the Defense Criminal Investigative Service, Homeland Security Investigations, and the U.S. Department of Commerce, Bureau of Industry and Security, Boston Field Office. The case was prosecuted by Assistant U.S. Attorneys Edward Chang and Hal Chen.

Italian Company Agrees to $100,000 Penalty for Unlawful Technology Export to Syria

WASHINGTON – The U.S. Department of Commerce's Bureau of Industry and Security (BIS) today announced that Area S.p.A. (Area), located in Italy, has agreed to a $100,000 civil penalty settling charges that it knowingly sold U.S.-origin network monitoring equipment to the Syrian Telecommunications Establishment (STE) without the required U.S. Government authorization. 

In February 2011, Area sold a Central Monitoring System (CMS) to STE. The CMS is capable of collecting data about web surfing, emails, online chatting, and Voice-over-Internet Protocol (VOIP). In the hands of the Syrian Government, the system could be used to further the repression of the Syrian people. 

The sale of the CMS to STE, which contained minimal U.S. content, was not subject to the Export Administration Regulations. However, Area subsequently transferred U.S.-origin network monitoring equipment to STE to monitor and test the CMS. This subsequent transfer required U.S. Government authorization, which was not obtained. Area purchased the network monitoring equipment, valued at approximately $140,000, from a company located in San Mateo, California. Area personnel hand-carried the equipment from Italy to Syria and then installed and provided training for STE. Area knew at the time of the transfer that U.S. export regulations prohibited the unlicensed transfer of U.S.-origin items to Syria.

Area cooperated with BIS in its investigation.

BIS controls exports and reexports of commodities, technology, and software to support national security and foreign policy , including nuclear , chemical and biological weapons, and missile non-proliferation, human rights, regional stability, and curbing terrorism. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit www.bis.doc.gov.